FG to suspend import duties on food, drugs, others to curb inflation

The Federal government has announced plans to suspend import duties and Value Added Tax (VAT) on staple food items, raw materials, agricultural inputs, pharmaceutical products, and other essential items for six months, beginning May 1, 2024.

The move is part of measures to curb inflation and improve the lives of Nigerians.

According to an Executive Order issued by President Bola Tinubu and sighted by our correspondent, the import duty and VAT relief will also apply to fertilisers, poultry feeds, flour and grains.

The Inflation Reduction and Price Stability Order also includes various measures to stimulate economic growth such as authorizing millers to import paddy rice at zero duty and VAT for six months in order to improve local supply
and capacity utilisation of rice millers.

– Suspension of VAT on basic food items, raw materials, agricultural inputs, and pharmaceutical products for the rest of 2024.

– Rebate on import duty by fixing the exchange rate at N800 to $1 for six months.

– Prioritization of capital expenditures on basic infrastructure such as access roads, solar-powered food storage facilities, irrigation, portable water, and public sanitation.

– Encouragement of states and local governments to adopt similar measures.

– Enforcement of default approvals and reduction of deficit financing.

– Provision of low-interest loans for agriculture, manufacturing, and pharmaceutical businesses.

According to the document, “The Ministry of Finance in collaboration with the CBN shall consider appropriate measures to provide low interest rate loans for agriculture, manufacturing, and pharmaceutical businesses.

“This may include authorising commercial banks to grant low interest rate loans to these sectors which
would count as part of the statutory Cash Reserve Ratio for such banks. This productive deployment will ultimately improve outputs and reduce inflation.
Government shall ensure prompt payment of all legitimate outstandings to contractors, pensioners, and salary arrears.”

Other highlights of the Order include: Promotion of dry-season farming, urban farming, and agricultural innovations.

– Preference for high local content production of pesticides, insecticides, and herbicides.

– Patronage of Made-in-Nigeria goods and services by governments and their agencies.

– Discontinuation of the Price Verification System by the CBN.

– The Nigeria Customs Service to fast-track clearing of agricultural equipment, food items, manufacturing inputs, and pharmaceutical products at ports.

“The Minister, Special Adviser to the President on Policy Coordination, the Nigeria Customs Service, Federal Inland Revenue Service may issue implementation guidelines in collaboration with any relevant agency or other stakeholders to give full effect to this Order, ” the document stated.